Despite sitting on an estimated 600 trillion cubic feet (tcf) of unproven gas reserves, the country has recorded persistent power outages in recent weeks, largely driven by gas supply shortfalls to generation companies (GenCos).
Major cities across Nigeria have experienced worse-than-usual electricity disruptions since last week, as power outages grow more frequent and prolonged.
Data from the Nigerian Oil Spill Monitor, corroborated by the National Oil Spill Detection and Response Agency (NOSDRA), paints a less encouraging picture of gas utilisation efforts in the country.
According to the data, oil and gas companies flared an estimated 323.2 million standard cubic feet (scf) of gas in 2025, highlighting persistent inefficiencies in Nigeria’s upstream operations and ongoing challenges in fully commercialising associated gas resources.
Flaring figures stood at 349.3 million scf in 2020. Since then, Nigeria has recorded volatility, recording 264.6 in 2021, 230.1 million scf in 2022, 278.3 million scf in 2023, and 301.3 million scf in 2024.
“Are we truly prepared for significant gas uptake and usage, especially considering the ‘Decade of Gas’ initiative from 2020 to 2030, with 40 percent of this period already elapsed and little tangible progress in flare reduction,” asked Oyinkepreye Orodu, a subface and energy researcher.
The rise in gas flaring comes at a time when Nigerian residents and local manufacturers are grappling with soaring energy costs, persistent gas shortages, and erratic power supply– factors that have forced many firms to scale down operations or shut down entirely.
Many gas-fired power plants are also operating below capacity due to fuel shortages, worsening electricity shortages across the country.
The Transmission Company of Nigeria confirmed that reduced gas supply has significantly cut electricity generation, leaving distribution companies with less power to deliver to homes and factories.
“With thermal plants forming the dominant share of Nigeria’s generation mix, any disruption in gas supply directly impacts grid output,” the Nigerian Independent System Operator (NISO) said.
Thermal plants, which account for the bulk of Nigeria’s generation mix, require an estimated 1,629.75 million standard cubic feet (MMSCF) of gas per day to operate at optimal capacity.
However, as of February 23, 2026, actual gas supply stood at approximately 692 MMSCF per day, representing less than 43 percent of daily requirements.
Industry analysts have warned that without stronger regulatory enforcement and better investment incentives, oil companies operating in Nigeria will continue to flare gas as a cheaper alternative to processing or reinjecting it.
Jide Pratt, country manager of TradeGrid, expressed concern over the persistent rise in gas flaring despite several government interventions aimed at curbing the practice.
According to him, weak penalties and the high cost of building gas infrastructure remain the primary reasons companies continue to flare associated gas.
Data from the NOSDRA showed that oil and gas companies incurred $646.3 million in penalties for gas flaring in 2025.
Pratt, who also serves as chief operating officer of AIONA, noted that incentives such as those introduced under Executive Order 40, which targets investments in non-associated gas, could help drive progress in reducing flaring.
“Fines for flaring should be increased to make reinjection more attractive,” he added. “Most companies take the cheaper option of paying fines rather than investing in extraction and piping.”
Nigeria has introduced several legislative measures to curb gas flaring since 1969. Since 1984, it has been illegal to flare gas without written approval from the Minister of Petroleum Resources.
Under current regulations, companies producing more than 10,000 barrels per day pay a penalty of $2 per 1,000 standard cubic feet (scf) of gas flared, while those producing below that threshold pay $0.50 per 1,000 scf.
Elijah Wisdom, chief executive officer and founder of Creek Transitway Ltd, said the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) should allow international oil companies to choose their own flare gas offtakers rather than having them assigned by regulators.
Wisdom also downplayed concerns over gas pricing, arguing that the key challenge lies in infrastructure and cost-reflective tariffs. Gas prices in the United States vary widely depending on location. The key issue is infrastructure and cost-reflective tariffs, he said.
He added that recent adjustments under the Domestic Gas Delivery Obligation (DGDO) have made pricing more reasonable, but outstanding debts within the sector, including obligations owed by NNPC Limited to the Niger Delta Power Holding Company, continue to affect operations across the gas-to-power value chain.
New grid asset company proposed to fix Nigeria’s power Bottleneck
President Bola Tinubu initiated plans to establish a Grid Asset Management Company (GAMCO) as part of efforts to address persistent challenges in Nigeria’s power sector, particularly within the transmission segment.
He disclosed this while briefing journalists at the State House in Abuja after a meeting of the Federal Executive Council (FEC) presided over by the president.
Mohammed Idris, minister of Information and National Orientation, said the council approved the setting up of a panel to drive the initiative following a memorandum presented by Tinubu for deliberation.
According to him, the proposal is aimed at strengthening the transmission component of Nigeria’s electricity value chain, which the government considers the most critical bottleneck to achieving stable and reliable power supply across the country.
He noted that following the deregulation of the power sector, the industry was unbundled into three key segments, generation, transmission and distribution, but the transmission arm has remained the weakest link.
“The proposed Grid Asset Management Company will be responsible for managing and strengthening the national electricity grid to improve efficiency and enhance power delivery nationwide,” Idris said.
To advance the plan, the FEC approved the establishment of an inter-ministerial committee tasked with developing the operational framework for the proposed company.
President Bola Tinubu initiated plans to establish a Grid Asset Management Company (GAMCO) as part of efforts to address persistent challenges in Nigeria’s power sector, particularly within the transmission segment.
He disclosed this while briefing journalists at the State House in Abuja after a meeting of the Federal Executive Council (FEC) presided over by the president.
Mohammed Idris, minister of Information and National Orientation, said the council approved the setting up of a panel to drive the initiative following a memorandum presented by Tinubu for deliberation.
According to him, the proposal is aimed at strengthening the transmission component of Nigeria’s electricity value chain, which the government considers the most critical bottleneck to achieving stable and reliable power supply across the country.
He noted that following the deregulation of the power sector, the industry was unbundled into three key segments, generation, transmission and distribution, but the transmission arm has remained the weakest link.
“The proposed Grid Asset Management Company will be responsible for managing and strengthening the national electricity grid to improve efficiency and enhance power delivery nationwide,” Idris said.
To advance the plan, the FEC approved the establishment of an inter-ministerial committee tasked with developing the operational framework for the proposed company.
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